Understanding the SEC’s 2026 Examination Priorities

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The U.S. Securities and Exchange Commission’s Division of Examinations (the Division) released its annual examination priorities, outlining the regulatory focus areas and supervisory expectations for examinations across the securities industry. The priorities are intended to promote compliance, prevent fraud, inform policy and monitor risk in support of the Division’s mission to protect investors, maintain fair and orderly markets and facilitate capital formation.

These priorities address a broad range of market participants, including investment advisers, investment companies, broker-dealers, clearing agencies and self-regulatory organizations, among others. As in prior years, the Division will apply a risk-based approach, with particular emphasis on SEC-registered investment advisers and investment companies that are newly registered or have not yet been examined.

Investment Advisers

The division will examine investment advisers’ adherence to fiduciary standards of conduct, particularly as it relates to retail investors. This includes a review of investment advice and related disclosures for consistency with the firm’s fiduciary obligations to serve in the best interests of clients. Investment products such as private credit funds and private funds with lockup periods will also be examined.

An investment adviser’s compliance program is also subject to the examination and will focus on core areas that include marketing, valuation, trading, portfolio management disclosures and filings and custody. The Division will review a firm’s policies and procedures (particularly those addressing adherence to fiduciary principles) to ensure they are reasonably designed to address any potential conflicts of interest.

Investment Companies

Due to the importance to the retail investor, the Division will also continue to prioritize examinations of registered investment companies, including mutual funds and exchange-traded funds (ETFs). The examination will cover an investment company’s compliance programs, fees and expenses and portfolio management practices and disclosures. Moreover, developing areas of interest such as investment companies with complex strategies, illiquid holdings (closed-end funds) or difficult to value assets (Level 3) will be a focus of the examinations.

Broker-Dealers

Broker-dealer compliance with the net capital rule, the customer protection rule and the related internal processes, procedures and controls will be a focus of the Division’s examinations. Trading related practices and services will also be reviewed for best execution, pricing and valuation of illiquid instruments and disclosures.

Consistent with the prior year examinations, Regulation Best Interest (Reg BI) will also be a focus of the Division’s examination. Areas of interest include recommendations of investment products and strategies, conflict of interest identification, alternative investments and satisfying the Care Obligation. Investment products such as ETFs that invest in illiquid assets, 529 plans, private placements and other alternative investments will also be a focus of the review.

Self-Regulatory Organizations

National security exchanges will also be examined by the Division to assess compliance with their obligations to enforce compliance with self-regulatory obligation rules and federal securities law.

Clearing Agencies

As required by the Dodd-Frank Act, the Division reviews each clearing agency designated as systematically important, as well as other registered clearing agencies. Examinations will focus on core risks, processes and controls and the nature of the clearing agencies financial and operational risk. Compliance with the Standards for Covered Clearing Agencies, which include maintaining sufficient financial resources, protecting against credit risk, managing defaults and mitigating operational risk, will all be subject to the Division’s review.

Other Market Participants

• Municipal advisors – Will be examined to ensure they have met their fiduciary duty. A municipal advisors’ required filings, professional qualifications, registration, recordkeeping, supervision requirements and compliance with Municipal Securities Rulemaking Board (MSRB) Rule G-42 will be the focus of the Division’s examinations.
  
  
• Transfer agents – Examinations for transfer agents will focus on the 2024 amendments to Regulation S-P and will also review the processing of items and transfers, recordkeeping, record retention, safeguarding of funds and securities, regulatory filings and incident response programs.
  
  
• Funding portals – The maintenance and transmission of investor funds, written policies and procedures and the related recordkeeping of qualified third-party funding portals will be subject to the Division’s examinations.
  
  
• Security-based swap dealers (SBSDs) – There will be continued focus from the Division on compliance by SBSDs with Regulation SBSR to accurately report security-based swap transactions to security-based swap data repositories.
  
  
• Security-based swap execution facilities (SBSEFs) – Rules and related internal policies and procedures associated with trade monitoring, trade processing and participation will be a focus of the Division.

Risk Areas Impacting Various Market Participants

Information Security and Operational Resiliency

• Cybersecurity – Is a growing area of concern and the Division will review registrants’ practices to protect investor information, records and assets. Particular attention will be placed on governance practices, data loss prevention, access controls, account management and responses and recovery to cyber-related incidents.
  
  
• Regulation S-ID and Regulation S-P – As applicable, examinations will focus on a firm’s policies and procedures, internal controls, oversight of third-party vendors and governance practices. A firm’s theft prevention program will be reviewed to ensure they are reasonably designed to identify and detect red flags and that they include firm trainings on identifying theft prevention.

Emerging Financial Technology

The risks associated with a registrant’s use of emerging technologies, such as automated tools, artificial intelligence (AI) technologies and trading algorithms, remain a focus of the Division. With respect to AI, the Division will assess whether firms have implemented adequate policies and procedures to monitor and supervise their use of AI technologies.

Regulation Systems Compliance and Integrity (SCI)

The Division will examine SCI entities and review the policies and procedures related to incident response and an SCI entity’s management of third-party vendor risk.

Anti-Money Laundering (AML)

The Bank Secrecy Act (BSA) requires broker-dealers, registered investment companies and others to establish an AML program to prevent money laundering or to finance nefarious organizations. The Division will focus its examinations on compliance with the applicable BSA requirements and related AML programs.

We Can Help

The PKF O’Connor Davies team includes auditors, white-collar forensic accountants, prior financial services executives and former SEC examiners. Together, we are uniquely qualified to assist with policy and procedure reviews, compliance testing, readiness assessments and remediation plans. Our specialized knowledge allows us to provide comprehensive support and guidance to help ensure your organization’s compliance, as well as effectively mitigate its risks.

The SEC’s full 2026 Examination Priorities, published on November 17, 2025, can be found here.

Contact Us

If you have any questions, please contact your PKF O’Connor Davies client service team or:

• Jay Monaghan, CPA
  Partner
  jmonaghan@pkfod.com
• Patrick Moran, CPA
  Partner
  Pmoran@pkfod.com
• Michael Stellwagen, CPA
  Partner
  mstellwagen@pkfod.com
• Rachel DiDio, CPA
  Partner
  rdidio@pkfod.com
• Thomas J. DeMayo, CISSP, CISA, CIPP/US, CRISC, CEH, CHFI, CCFE
  Partner
  tdemayo@pkfod.com